U.S. debt ceiling impasse? Fed’s ‘loathsome’ game plan for the ‘unthinkable’

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By Ann Saphir (Reuters) -Treasury Secretary Janet Yellen says failure to raise the U.S. debt limit could lead to the unthinkable: a default on government payment obligations. That’s an outcome the White House on Friday warned could plunge the economy into recession. If the impasse in Congress over the $28.5 trillion debt limit isn’t resolved before an October deadline, what would the Federal Reserve – the backstop for U.S. financial markets as the lender of last resort – be prepared to do? As it turns out, Fed Chair Jerome Powell may already have something of a game plan. The country faced a s…

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